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JB Hi-Fi weathers the retail storm

Kim Christian

JB Hi-Fi is proving more resilient to slumping consumer confidence than other retailers.

The electronics retailer remains on track to lift annual profit by about 10 per cent, despite winding back its sales expectations since the end of March.

Analysts say JB Hi-Fi is performing better than other retailers as it is not exposed to seasonal factors such as unusually warm weather, and due to its expansion into new product areas.

The company said on Thursday it expects a 5.3 per cent rise in annual sales for 2013/14, weaker than its previous forecast of six to eight per cent growth.

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But it is sticking to its previous forecast of a $126-$129 million net profit for the year, a rise of between 8.3 and 10.8 per cent.

That is in contrast to several other major retailers, who in recent weeks have warned of a sales slump amid consumer worries about spending cuts announced in May's federal budget.

Shares in JB Hi-Fi soared in early trade, but fell back during afternoon trade, and closed 22 cents higher, up 1.2 per cent, at $18.95.

CBA retail analyst Andrew McLennan said JB Hi-Fi was performing well during a period of disastrous consumer sentiment, continuing with store expansions and branching out into new categories such as coffee machines and other household appliances.

"For them to have held to a positive sales growth number in the fourth quarter is actually a good outcome," Mr McLennan said.

"More recently JB Hi-Fi have expanded into their JB Home category of household electronics products, including whitegoods and small appliances, and that appears to be enhancing their underlying sales growth off a relatively small base."

This strategy had differentiated JB Hi-Fi from some of its competitors as CD and DVD sales continued to slide, Mr McLennan said.

JB Hi-Fi was also not as exposed to seasonal factors as apparel retailers, who were experiencing difficult sales conditions due to warm weather in the lead-up to winter, he said.

Meanwhile, JB Hi-Fi chief executive Terry Smart has confirmed he will retire on June 30.

Mr Smart announced his plans to step down in April, and will hand over the reins to chief financial officer Richard Murray.